Cloud Computing provides a strong frame to a company to solve one of the most serious problem for IT industry that is Resource Planning. Every new company dreams of getting famous in few days and expect that new clients start using their services. . But for the IT department this can be nightmare because such flow of traffic will require more and more computing power than on any other day. Now to handle the situation if the company buys many computer equipments, than on an average day most of the machines will sit idle. From other point of view if the systems of a company are too weak to handle the load then they might crash leaving many clients and business in bizarre. This is where cloud computing comes into action. Cloud Computing allows a company to use as much as resources as they want and handle the sudden increase of traffic. And on the day when traffic is low company can save money by only using few machines and thus saving a lot of money. Computer equipments are not so costly how they used to be in past times, but the administration of machines is expensive. To solve this problem what Cloud Computing do is basically gathering large number of low cost computers, all other requirements like maintenance procedures and management of systems can all be automated. Therefore by using Cloud Computing you need very few administrators which can manage thousands of machine. Third and th most important advantage of Cloud Computing is that it is completely compatible to multiprocessor technology. This is basically because of the increased importance of technologies like virtualization and parallel programming. Single processors can not handle immense pressure of the increasing demand of fast processing. To face the situation hardware designers started building multi core chips with the prediction that number of core chips will increase on an exponential rate in near future. So available computers have to be parallel with the increasing computer processing power. This is eased by Cloud virtualization techniques which allows the processing power to be utilized properly and efficiently .